Opec Levels Reach New Highs

The article in today's Wall Street Journal, "OPEC Feb Output Reaches New Highs" has much relevancy to my final paper topic. My paper is going to analyze the oil production levels of the 12 OPEC members and the non-OPEC oil producers and how their respective oil production levels affect the price of oil. The article explains how the 12 OPEC members in February produced a record high level of oil production since 2008, a little above 32 billion barrels a day. The reason for this massive increase in production is because of the current sanctions that have been imposed on Iran. Not only have sanctions been put in place but Iran has decided to cut supplies to France and the U.K. and threatens the rest of the European Union. Thankfully, the OPEC members, particularly in the Persian Gulf region aside from Iran, have pledged to make up any missing barrels OPEC may owe to those countries mentioned above.

So there is a reason why OPEC has increased oil production so significantly which may or may not play a role in oil prices. It will be interesting to see how the uncertainty with Iran's oil exportation will affect the oil markets.

In terms of my paper, I will have to take into account such variables as sanctions, oil embargoes, and supply cuts because these all affect oil production and oil prices. For example, during the Saudi oil embargo in the 1970's prices sky rocketed and the U.S. implemented certain days when people could fuel their cars depending on what letters and numbers their license plates ended with. There are plenty of different factors that I will need to respect when analyzing oil prices, not just the production levels of OPEC and non-OPEC members.